2nd LD-Writethru: China's new yuan loans rise in August

0 Comment(s)Print E-mail Xinhua, September 11, 2020
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BEIJING, Sept. 11 (Xinhua) -- China's new yuan-denominated loans continued to rise within a reasonable range in August as economic activities gradually recovered after effective epidemic containment, official data showed on Friday.

China's new yuan-denominated loans hit 1.28 trillion yuan (about 187.13 billion U.S. dollars) in August, a year-on-year increase of 69.4 billion yuan, said the People's Bank of China, the central bank.

The M2, a broad measure of money supply that covers cash in circulation and all deposits, rose by 10.4 percent year on year to 213.68 trillion yuan at the end of August.

The growth rate was up 2.2 percentage points compared with the same period last year, but 0.3 percentage points lower than that at the end of July.

As the epidemic prevention and controls make headway and the economy recovers, monetary policies are gradually returning to the normal level, and the liquidity injection via open market operations has become more restrained, according to a research note from China Minsheng Bank.

"Overall, M2 growth remaining at a reasonable level is conducive to propping up the real economy while forestalling risks," the note read.

The narrow measure of the money supply (M1), which covers cash in circulation plus demand deposits, came in at 60.13 trillion yuan by the end of August, up by 8 percent from last year.

The strong M1 growth, along with the rebounding sub-index for new orders of the purchasing managers' index and the firming producer price index, demonstrated positive improvements in enterprises' business activities, the note read.

The M0, the amount of cash in circulation, rose by 9.4 percent year on year to 8 trillion yuan by the end of last month.

Newly-added social financing, a measurement of funds the real economy receives from the financial system, registered a significant 1.39-trillion-yuan rise to 3.58 trillion yuan in August.

In breakdown, net financing via corporate bonds increased by 24.9 billion yuan from a year ago to 363.3 billion yuan, while non-financial firms' stock financing from the mainland markets went up by 102.6 billion yuan from a year ago to 128.2 billion yuan.

Friday's data also showed that by the end of August, total social financing increased by 13.3 percent year on year to 276.74 trillion yuan, with the outstanding loans to the real economy jumping by 13.3 percent to 166.34 trillion yuan.

The country will use a variety of tools, such as required reserve ratio reductions, interest rate cuts, and re-lending to enable M2 money supply and aggregate financing to grow at notably higher rates than last year, according to this year's government work report. Enditem

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